SchlumbergerSema 3Q/02

SchlumbergerSema reported that operating revenue of $896 million in the third quarter increased 6% year-on-year and 5% sequentially despite the weak IT spending environment. Pretax operating income of $20 million, before charges, declined 8% year-on-year but doubled sequentially due to continuous cost-containment efforts and improved margins in the UK GeoMarket. However, prices continued to weaken. To adapt to the slower growth environment, the cost reduction program continued during the quarter resulting in a pretax operating charge of $16 million ($12 million after tax) for employee severance costs. Volume products revenue of $210 million experienced strong year-on-year and sequential growth of 10% and 5% respectively. This improvement reflected an all-time record volume of mobilecom cards, higher demand in the banking card segment, and sustained activity in banking and parking terminals. Pretax operating income of $9 million improved 42% sequentially, mainly attributable to better productivity in smart cards and terminals. For complete details on SchlumbergerSema’s third quarter performance visit CardData ([www.carddata.com][1]).

[1]: http://www.carddata.com

RBA FEE FIGHT

VISA and MasterCard argued in The Federal Court of Australia last week
that it may take up to six weeks to present their case against the Reserve
Bank of Australia over new credit card laws pertaining to merchant fees.
The Court has set a trial date of May 5th but will hold related hearings on
November 18 and April 18. The card associations argue that the Reserve Bank
of Australia hasn’t complied with its obligations under the Payment Systems
Act, and that the proposed changes don’t meet the public-interest test
required under the act. In August, the Reserve Bank of Australia released
its final reforms on credit card programs which include dropping average
interchange fees by 40% and lifting the restriction imposed by credit card
programs which prevent merchants from recovering from cardholders the costs
of accepting credit cards. Under the new RBA rules, interchange fees will
decrease from around 95 basis points to approximately 55-60 basis points by
July 1, 2003. The Reserve Bank’s standard on merchant pricing will come
into force on January 1, 2003. The RBA also announced an end to
restrictions imposed by credit card networks which limit the entry of new
competitors. Specialist credit card institutions authorized and supervised
by the Australian Prudential Regulation Authority will now be eligible to
apply to participate in credit card programs. All the reform measures will
apply to the credit card networks operated in Australia by Bankcard,
MasterCard and VISA, which were formally designated by the Reserve Bank as
payment systems subject to its regulation under the Payment Systems
(Regulation) Act 1998. American Express and Diners Club have each indicated
to the Reserve Bank that they will remove their restrictions on merchant
pricing.

Chase 3Q/02

Chase has surpassed the $50 billion mark in outstandings as nearly 900,000 new accounts were added during the third quarter. Since 3Q/01 the Chase card portfolio has grown 31% primarily due to its acquisition of Providian receivables. On a managed basis, the credit card net charge-off ratio was 5.51%, compared to 6.42% for the second quarter and 5.64% for the third quarter of 2001. The improvement from the second quarter reflects lower bankruptcies and higher balances. During the quarter, Chase boosted loss reserves by $189 million to comply with new FFIEC draft guidelines. Chase ended the quarter with $51.1 billion in outstandings compared with $49.5 billion in the previous quarter, and $38.9 billion in the year ago quarter. Third quarter volume was $23.0 billion, a 28% gain over 3Q/01. Total accounts now stand at 28.6 million compared to 23.4 million on year ago. During the third quarter, Chase signed up 900,000 new accounts but closed 400,000 accounts. For complete details on Chase’s third quarter performance visit CardData ([www.carddata.com][1]).

[1]: http://www.carddata.com

USTT & ZiLOG

USA Technologies and ZiLOG have combined resources to co-market and co-develop a joint product that will integrate the “e-Port” wireless transaction processing and monitoring capabilities with ZiLOG’s Internet ready “eZ80” microprocessor. Both companies are also developing reference designs and development kits that will be available for manufacturers to easily incorporate network ready devices into their own appliances. These appliances will be able to utilize various networks, including USA Technologies’ network, for transaction processing and monitoring of these appliances.

Household 3Q/02

Household reported U.S. bank card receivables of $15,828,360,000 for the third quarter, up 4.9% from one year. U.S. VISA/MasterCard volume for 3Q/02 was $9.3 billion, compared to $9.0 billion in the previous quarter, and $8.6 billion one year ago. Active accounts stood at 10,943,000 compared to 10,224,000 for 2Q/02. Managed private label outstandings rose 12.7% to $13,643,000,000. VISA and MasterCard charge-offs for the third quarter were 6.81%, compared to 7.54% in 2Q/02, and 6.75% one year ago. Private label losses were 6.12% compared to 5.13% for 3Q/01. Delinquency (60+ days) came in at 4.14% at the end of thrid quarter versus 3.90% in the previous quarter. For complete details on Household’s third quarter performance visit CardData ([www.carddata.com][1]).

[1]: http://www.carddata.com

EGG SECURITIZATION

Egg Banking PLC is placing its VISA card receivables and, potentially,
MasterCard receivables on accounts its owns as collateral for new
securitization. Standard & Poor’s Ratings Services said that it assigned
its preliminary credit ratings to the sterling- and euro-denominated
asset-backed floating-rate notes to be issued by Pillar Funding Series
2002-1 Plc. Egg was launched in 1996 as a banking subsidiary of Prudential
PLC, the U.K.-based financial services group. Egg is primarily focused on
providing Internet-based financial services to its customers. Egg offers
deposit accounts, credit cards, personal loans, and mortgages via the
Internet and by telephone.

METRIS 3Q/02

The sub-prime fallout continues to takes its toll on Metris Companies/Direct Merchants Bank. The issuer reported a net loss for the third quarter of $1.3 million, however, the loss is well below its second quarter loss of $36.4 million. The managed credit card loan portfolio now stands at $11.6 billion, a decrease of $118 million during the quarter. During the third quarter, Metris sold $47 million of its subsidiary Direct Merchants Bank’s receivables. These accounts were revoked and 2-cycle plus delinquent as of August 31. In the third quarter, Metris added more than 170,000 new credit card accounts, resulting in 3.6 million active accounts at September 30, 2002. Managed credit card fees, interchange and other credit card income decreased 12% to $146.1 million for the third quarter of 2002 from $165.7 million in the third quarter of 2001. Credit card charge volume decreased 17% to $2.2 billion in the third quarter of 2002, compared to $2.6 billion in the third quarter of 2001. For the first nine months of 2002, credit card charge volume was $6.4 billion, a 10 percent decrease from the same period in 2001. The managed net charge-off rate was 15.1% for the third quarter of 2002, compared to 15.0% for the prior quarter and 10.7% for the third quarter of 2001. The managed delinquency rate was 10.8% for the third quarter, compared to 10.2% at June 30th, and 8.9% one year ago. For complete details on Metris’ third quarter performance visit CardData ([www.carddata.com][1]).

[1]: http://www.carddata.com

SVS & AMC

TN-based Stored Value Systems identified itself yesterday as the supplier of the new “AMC Entertainment Card.” Stored Value Systems Inc., a wholly-owned subsidiary of Comdata Corporation, announced the launch of the AMC Entertainment Card; an electronic cash card to be used as replacements for the theatre chain’s paper gift certificates. AMC becomes the first major motion picture theatre operator to nationally adopt a cash card component as a paperless alternative to traditional gift certificates. AMC operates 242 theatres with 3,500 screens. The debut of the AMC Entertainment Card coincides with the start of the busiest season for gift certificate sales. About half of all gift certificate sales occur between October and late December. Movie gift certificates also are highly popular for graduations, birthdays, and Father’s Day and Mother’s Day.

ADS 3Q/02

Alliance Data Systems reported third quarter revenue increased over 8% to $218.7 million compared to $201.7 million for 3Q/01. Transaction Services revenue, accounting for approximately half of the Company’s total revenue, increased 2%, to $133.9 million. Credit Services revenue, approximately one-quarter of the Company’s total revenue, increased 20% to $84.8 million. Total private label credit sales increased 23%, driving fee income and portfolio growth. Marketing Services revenue increased 15% to $61.5 million. “AIR MILES Reward Miles” issued and redeemed continued to register strong growth during the quarter as a result of the increasing number of new program members, new sponsors and deeper relationships with existing sponsors. ADS raised its guidance for the full year of 2002 to about $870 million. For complete details on ADS’s third quarter performance visit CardData ([www.carddata.com][1]).

[1]: http://www.carddata.com

SANCHEZ BEACHHEAD

Sanchez Computer Associates announced the opening of its new European
headquarters in Amsterdam. Europe accounts for more than a quarter of
Sanchez’s annual revenue. Sanchez is a leader in developing and marketing
scalable and integrated software and services that provide banking,
customer integration, brokerage, wealth management and outsourcing
solutions to nearly 400 financial institutions in 21 countries. Sanchez’s
customers include Lloyds TSB, ING Group, Goldman Sachs, HSBC, CSFB, Merrill
Lynch, Morgan Stanley, Scotiabank and Sumitomo Mitsui Banking Corp., among
others. Sanchez corporate headquarters is located in Malvern, Pa., USA.